Bitcoin ‘Early’ in the ‘Adoption Curve’ and Has ‘Significant Upside Potential’ as Digital Gold, says Miller Opportunity Trust in SEC Filing

Billionaire manager Bill Miller invested in GBTC when it was at a steep discount as it provided “additional upside potential.” Also bought $21.5 mln of COIN shares, calling it “quite a steal.”


Miller Opportunity Trust, a fund run by billionaire manager Bill Miller talked about its Bitcoin investment in the latest filing with the US Securities and Exchange Commission (SEC).

As we reported about a week ago, the fund manager disclosed exposure to the largest cryptocurrency through Grayscale’s Bitcoin Trust (GBTC) via Miller Opportunity Trust. The Trust owns 1.5 million shares of GBTC valued at roughly $44.72 million.

GBTC is currently trading at a 13% discount to the underlying asset Bitcoin, which is currently trading at $49,950, after soaring past $51,000 on Friday.

In the SEC filing, Miller Opportunity Trust wrote that after being observers of Bitcoin for a long time, finally, in the second quarter of 2021, they got the approval to invest in GBTC, an open-ended grantor trust, fully invested in the leading cryptocurrency.

It further noted that in the quarter, as bitcoin fell more than 50%, the trust traded at one of its larger discounts, 21.23% on May 14, “providing additional upside potential.”

“We believe Bitcoin has significant upside potential as a form of “digital gold.” With gold's market capitalization greater than $11T, Bitcoin's current cap close to $600B would have a long way to go to catch up. We are early in a continuing adoption curve, and Bitcoin will be volatile, but we think the risk-reward is attractive,” reads the document.

Meanwhile, it also noted that there is relatively little use of bitcoin in the retail and commercial marketplace compared to its relatively large use by speculators, which contributes to price volatility.

Besides investing in GBTC, the fund also disclosed owning 85,000 shares of Coinbase worth $21.53 million. As of writing, COIN shares are trading at $278.44, seeing an uptrend since late July, the same as Bitcoin. Still, compared to Bitcoin being down 23% from its all-time high, COIN has some way to go to reach the $429.54 peak made on its debut day.

The Trust noted that the cryptocurrency exchange became a public company in mid-April following their direct listing on Nasdaq at a reference price of $250.

“We believe over the long term the company has the potential to be the leading technology platform in the growing cryptocurrency space,” reads the filing.

With COIN’s 2021 earnings trading at 30x, it “is quite a steal for a quickly growing company in this market,” whose revenues are expected to be 4.5x of 2020 numbers.

While the market may be concerned about the revenues and earnings, given that they are peak cycle figures, “we see significant potential for the business over the long term as the nascent industry continues to grow and COIN cements its position as the leading platform,” it said.

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